that if price was able to hold the Value Area High
into the open, we would see a move to new All-Time Highs on the S&P 500.
This indeed proved to hold true. The second part of the analysis, which goes
back to last Monday, was that if prices were able to break to new All-Time
Highs, it would have to be on a parabolic move: Analysis was based on the fact
that price had fallen underneath a future mapping of itself, displaced 13 days
forward. The idea of mapping price displaced into the future-- it is not an
invention of modern times. There are several highly regarded technicians that
have used this form of analysis for nearly 100 years-- To name a few, WM Hurst,
Bill Williams, and more recently the creator of sentient trader( who has based
his entire trading algorithm on the writings of WM Hurst). Bill Williams called
this the alligator. He used displaced moving averages of five, eight, and 13
periods, respectively and moved them into the future those same corresponding
numbers.Personally, I have found this methodology capable of signaling
important and/or key troughs as well as gaining a head start in noticing the
appearance of peaks. WM Hurst noted that the wavelengths of troughs were to be
measured not peaks.

Getting back to price action that has brought us here, as this is
exactly what has unfolded. The jobs report Sunday night that took /ES Futures
lower and had the market open with a gap down-- All of this action, ultimately
served as a textbook Wyckoff 'Spring.' The interaction with the Value Area and
Point of Control (POC) Friday gave us several important clues to take away
going into next week's trading. First, price lost its' grip on the POC
overnight and moved substantially to the downside. As the New York Market
opened, price made one last effort to climb to the point of control. This
effort was stymied by the resistance of the overhead moving averages. The 60
period simple moving average (SMA) was the first barrier, followed by the 110
period exponential moving average (EMA). Price came within several ticks of
Value Area Low (VAL); however, the rejection here built increasing momentum to
the short side, which carried price to new lows. By no coincidence, VAL from
two sessions prior, gave price temporary support and that support held through the
close. The Monkey Bars (Contract Volume Profile) and TPO (Time Price
Opportunity) of the five-day trading session showed a point of control at 1582 which I mentioned in Friday's screencast, on youtube.com/dWbstreet, as price moved beyond those levels down into the 70's. I noted at that moment on new lows, that price HAD to catch a bid back to 1582, at that time or the market was going to continue to decline into the close.
The 10 day session, as well as the 20 day session, of the same profiles – shows
POC at much lower levels. Watch interaction of price at these VPOC's (Virgin
Point of Control) for clues going into next week's trading. These are referred
to in this fashion because price continued higher, without ever revisiting the
prior day's value. We are seeing consecutive days on the profile with the clear
appearance of what would resemble lower a case letter 'b.' This configuration
denotes traders getting bad fills at high prices. Most of these traders are
amateurs and will continue to hold through losses, which will accelerate the
decline once the losses become unbearable. This will also denote the change of
investor psychology as the market reverses from all-time highs.